Net present value calculation

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Reference no: EM132068749

(Net present value calculation) Carson Trucking is considering whether to expand its regional service center in Mohab, UT. The expansion requires the expenditure of $11,000,000 on new service equipment and would generate annual net cash inflows from reduced costs of operations equal to $4,000,000per year for each of the next 7 years. In year 7 the firm will also get back a cash flow equal to the salvage value of the equipment, which is valued at $0.8 million. Thus, in year 7 the investment cash inflow totals $4,800,000.

Calculate the project's NPV using a discount rate of 6 percent.

Reference no: EM132068749

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